Glasgow 2014: Call for payday lender sponsor ban

CITIZENS Advice Scotland has written to the organisers of the Commonwealth Games to call for a ban on all payday loan adverts or sponsorship for this summer’s event in Glasgow.
Payday lenders such as Wonga have been active in sports sponsorship. Picture: SNSPayday lenders such as Wonga have been active in sports sponsorship. Picture: SNS
Payday lenders such as Wonga have been active in sports sponsorship. Picture: SNS

The organisation – the umbrella group for the network of Citizens Advice Bureaux across Scotland – said it wanted payday loans firms, which charge high interest rates on short term loans, to be regarded in the same category as tobacco and alcohol, which are no longer allowed to sponsor sporting events.

The organisers of the Games have refused to “take a position” on the issue – but confirmed no such sponsorship deals are currently in place.

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CAS says it deals with over 100 cases every week of people who are in crisis debts to payday lenders, which it claims, often destroy their health and relationships as well as finances.

“Twenty years ago it was the norm for tobacco and alcohol companies to sponsor big sporting occasions. Today it is generally accepted that this is inappropriate and that products which have a damaging impact on people should be excluded from sponsoring such high-profile events. We believe that payday loans should be seen in this same category and banned from this year’s Games,” said Susan McPhee, head of policy at Citizens Advice Scotland.

“Over the last few years we have published considerable evidence about the damage done by payday loan companies to Citizens Advice Bureaux clients. Common problems include misleading adverts, massive interest rates, failure to assess applicants’ financial backgrounds, aggressive efforts to reclaim debts and trapping people in further debt through ‘roll-over’ loans. We don’t believe companies who operate like this have any place in a great sporting occasion.”

She added: “All Scots will remember how proud we were when Glasgow was awarded the Games, and we’re all looking forward to a brilliant summer hosting this gala of sporting excellence. That pride will be tainted if we see the city plastered in banner adverts for companies which trade in trapping families in misery and debt.

“I’m sorry that the organisers feel they are currently unable to take a position on this issue, but having opened the dialogue we will continue to engage with them and to press our case.”

In his reply, David Grevemberg, chief executive of the Commonwealth Games organising committee, pointed out the organisation’s responsibility to raise 20 per cent of the funds required to stage the Games – with the rest coming from sources such as government and Glasgow City Council.

“All sponsorship partners are assessed on a number of levels and a very important consideration for us is how a sponsor will contribute to the mission and ambitions of Glasgow 2014.

“I can advise that we have no sponsorship partnership of the type you describe and we have no plans to establish one at present. However, since our commercial programme is ongoing, you will understand that we are unable to take a public position on this issue.”

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In 2012, controversy erupted when it emerged that the Olympic Games in London counted fast food chain McDonalds and fizzy drinks manufacturer Coca Cola among its main sponsors.

CAS added that it plans to contact ministers of both the Scottish and UK governments to ask for their support on the issue.

A poll last week showed that 70 per cent of people in the UK would support a ban on all payday loan advertising.